MGM rebounds; Dodgers up for sale

NEW YORK (CBS.MW) - It was an up-and-down day for MGM Inc. shareholders on Wednesday. First, the stock fell, for a second consecutive day. Then, it fought back and inched into positive territory. Finally, it fell and closed down 40 cents, or 4 percent, to $11.

On Tuesday, the issue stumbled after Kirk Kerkorian's Tracinda Corp. said it would sell 25 million shares of MGM
MGM, +1.85%
for tax purposes.

MGM has been regarded as takeover bait for some time now. While the company has a relatively small film business, it has a plum in its comprehensive film library.

But the company's stock tends to take big hits when MGM movies fail to live up to expectations, as was the case with last year's box office dud, "Windtalkers."

Will News Corp. sell the Dodgers?

It's beginning to look like it's "when" will News Corp. sell the Los Angeles Dodgers -- not merely if the Australian global media powerhouse will make a deal.

News Corp.
NWS, +1.43%
leader Rupert Murdoch said on "Charlie Rose" on Tuesday night that the "strategic imperative has passed" for News Corp. to own a baseball team in the U.S., according to News Corp. spokesman Andrew Butcher.

Officially, Butcher declined comment on whether the team is on the block.

According to Sports Business Daily, former Madison Square Garden President Dave Checketts has offered to pay $650 million for the Dodgers, one of the most storied teams in American baseball annals, but only if Checketts can seize control of FSN West 2 [Fox Sports Net, a coveted News Corp. holding]

It seems as if News Corp. regards the baseball club much as a team treats an aging star that has failed to live up to his potential and promise.

News Corp. believed that the Dodgers would be able to drive its cable television operation in the U.S., much as the Atlanta Braves once did for Turner Broadcasting.

News Corp. spent lavishly, including making the decision to overpay for pitcher Kevin Brown, among others. But the Dodgers never even reached the World Series, much less won a championship, under News Corp.'s control.

News Corp. dropped 66 cents, or 2 percent, to $27.07.

Further, EchoStar Communications (DISH: news, chart, profile) has spoken with News Corp. (NWS: news, chart, profile) and Liberty Media about a sale of the second-biggest U.S. satellite-television service, according to the Wall Street Journal on Tuesday.

News Corp. may be willing to part with the Dodgers because the baseball team is anything but a core asset. News Corp.'s focus now is on DirecTV.

The Dodgers disappointed fans with spotty play under News Corp.'s control. The giant company has also had to contend with soaring salary costs for the players as well as a threatened players' strike last year.

Dow Jones falters

Dow Jones, the publisher of the Wall Street Journal and Barron's, is expected to report its earnings later this week.

Dow Jones may report good news on the advertising front, following the example of Knight-Ridder this week.

On Tuesday, Knight-Ridder
KRI, -2.72%
one of the nation's largest newspaper publishers, reported a surge in advertising revenue, lifting hopes in the media industry that the prolonged ad slump may finally be subsiding.

Lions Gate surges

Meanwhile, Lions Gate Entertainment Corp.
LGF
a small-cap stock known in 2002 for such daring movies as "Secretary" and "Max," added 5 percent, or 10 cents to $2.

The stock was helped by the company's announcement that it had struck a deal to reacquire all DVD and home video distribution rights to its library of theatrical product from Universal Studios Home Video during the first half of this year.

While such household names as AOL Time Warner
AOL
and Walt Disney
DIS, +0.49%
routinely garner attention on Wall Street, it is much tougher for a small company such as Lions Gate.

Lions Gate, which focuses on small-budget movies with edgy and sophisticated themes, has been making a name for itself in Hollywood for taking risks and succeeding.

Such prominent actors as Oscar winners Dustin Hoffman ("Confidence") and Robert De Niro ("Godsend") are scheduled to star in Lions Gate films later this year.

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